FDIC closes small bank in Alabama

FDIC closes small bank in Alabama

WASHINGTON (AP) - Federal regulators have seized a small bank in Alabama, bringing to 24 the number of U.S. banks that have failed so far this year.

The Federal Deposit Insurance Corp. said Friday that it closed Alabama Trust Bank NA in Sylacauga.

The bank had about $51.6 million in assets and $45.1 million in deposits as of March 31.

Southern States Bank, based in Anniston, Ala., agreed to take over the deposits and essentially all the assets of the failed bank, which had one branch.

The FDIC estimates that failure of Alabama Trust Bank will cost the insurance fund $8.9 million.

The lender is the first FDIC-insured institution to fail this year in Alabama.

The pace of bank closures has slowed sharply after ballooning following the financial crisis in 2008. By this time last year, 40 banks had failed.

In 2010, regulators seized 157 banks, the most in any year since the savings and loan crisis two decades ago. Those failures cost the deposit insurance fund around $23 billion. The FDIC has said 2010 likely was the high-water mark for bank failures from the Great Recession. Last year, the 92 failures cost an estimated $7.9 billion.

In 2009, there were 140 bank failures that cost the insurance fund about $36 billion, a larger sum than in 2010 because the banks involved were bigger on average. Twenty-five banks failed in 2008, the year the financial crisis struck with force; only three were closed in 2007.

From 2008 through 2011, bank failures cost the fund an estimated $88 billion. The FDIC expects failures from 2012 through 2016 to cost $12 billion.

The deposit insurance fund fell into the red in 2009. With failures slowing, the FDIC's fund balance turned positive in the second quarter of last year.

By Dec. 31 it stood at $11.8 billion, about 50 percent higher than three months earlier, according to the FDIC.